All posts tagged the price is right

The big sell-off in the bond market looks like it has reversed itself today and there’s a good chance that yields could edge their way back to levels seen late last week (i.e., under 3%).

Two factors boosting bonds right now. First, the government just completed an auction of $21 billion in 30-year bonds. The sale went well and capped a big week of government debt sales that didn’t always go so decently.

On Monday, before the government started auctioning more than $95 billion in notes and bonds, bonds went into retreat when President Obama announced his big tax-cutapalooza deal with Congressional Republicans. Once bonds start moving lower during a big auction week, they keep moving lower. This is called “making room for supply” or “getting the price as low as possible before we buy the dern things.” Now that the auctions are done, bonds are rallying. Voila.

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Global investment banks got a second-quarter revenue boost from a surge in Asian stock trading. But given China’s market volatility and stock declines in some other countries, those revenue gains may be hard to replicate.